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By Trend

Iran’s oil minister has called on the local companies to take 70 percent share in executive works in the South Pars Phase 11 (SP11) project.

Iran signed a heads of agreement (HOA) with French Total and China National Petroleum Corporation, CNPC, to develop the Phase 11 of South Pars gas field on Nov.8.

Iran’s Oil Minister Bijan Namdar Zanganeh said the cost of the project is expected to reach $4.8 billion and local companies can join the project, IRNA reported Nov. 8.

Total will operate the SP11 project with a 50.1-percent interest alongside Petropars (19.9 percent), a subsidiary of National Iranian Oil Company, and CNPC (30 percent).

Zanganeh said it is expected that the final agreement on SP11 will be signed in near future and development of the first phase of the project would take 40 months, then the pressure boosting compressors would be launched three years after completing the first phase.

“The SP11 project will be developed in two phases. The first phase, with an estimated total cost of around $2 billion equivalent, will consist of 30 wells and two well head platforms connected to existing onshore treatment facilities by two subsea pipelines. At a later stage, a second investment phase, involving the construction of offshore compression facilities, will be launched once required by the reservoir conditions,” Total announced Nov. 8.

Zanganeh said the recovery rate of SP11 is expected to stand at 70 percent.

IRNA reported that the period of investment return will be 10 years after commencing the project, while the reward payments will last 20 years.

The National Iranian Oil Company and the project partners will conduct exclusive negotiations to finalize a 20-year contract in accordance with the technical and economic terms established in the HOA, within the framework of Iranian Petroleum Contract (IPC), recently approved by the Iranian Parliament.

SP11 is expected to produce 56 million cubic meters of gas per day.

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